3 Tips to Tackle Hotel Costs
Between the rising cost of labor, decreased guest demand and ever-changing Covid guidance, hotels and motels have taken numerous hits to profitability. Conditions likely are going to remain challenging for some time to come, but, in the meantime, here are 3 ways to tackle your hotel’s costs:
1. Review contracts
Contracts should be reviewed. That may sound like a return to early 2020, but the time has come to once again renegotiate your contracts – from insurance to linens; you name it. Due to scarce resources and delays in delivery, costs are rapidly rising. Taking the time now to get new contracts means you get the best possible pricing. Lock in your price now; it’s to your advantage.
2. Convert Space
Look closely at every corner of your property and think creatively to convert space into a revenue generator. An unused guest room or manager’s quarters can be rented for office space or used by the week for an audit or a local meeting. Bigger spaces can be rented out for storage or retail. Some properties have even converted part of their lobby to another use. Whatever the highest use at the moment, is best.
3. Reduce Staff
Consider having your staff at one property manage another: we did this when we had a Best Western and a Holiday Inn Express across the street from one another, and the 2008 real estate crash killed our market. Also consider promoting from within: you may very well have someone on the front desk who really shows promise and could be promoted to an assistant manager and trained, while still at a more affordable salary.
All in all, we will all want to make sure our costs are tightly controlled this last quarter, as revenue and guest demand builds back up as we approach 2022.